arXiv 4 Apr 2023 · Econometrics · publishedJournal of Econometrics (2024)
arXiv:2304.01921 · PDF · DOI · OpenAlex · Extracted main text
We introduce a novel framework for individual-level welfare analysis. It builds on a parametric model for continuous demand with a quasilinear utility function, allowing for heterogeneous coefficients and unobserved individual-good-level preference shocks. We obtain bounds on the individual-level consumer welfare loss at any confidence level due to a hypothetical price increase, solving a scalable optimization problem constrained by a novel confidence set under an independence restriction. This confidence set is computationally simple and robust to weak instruments, nonlinearity, and partial identification. The validity of the confidence set is guaranteed by our new results on the joint limiting distribution of the independence test by Chatterjee (2021). These results together with the confidence set may have applications beyond welfare analysis. Monte Carlo simulations and two empirical applications on gasoline and food demand demonstrate the effectiveness of our method.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Chatterjee, S (2021) A new coefficient of correlation | 0.941 | 6 | 4 | 83% |
| 2 | Shi, H., M. Drton, and F. Han (2022) On the power of chatterjee’s rank correlation | 0.928 | 5 | 4 | 80% |
| 3 | Brown, D. J., R. Deb, and M. H. Wegkamp (2007) Tests of independence in separable econometric models: Theory and application | 0.737 | 3 | 2 | 100% |
| 4 | Bergsma, W. and A. Dassios (2014) A consistent test of independence based on a sign covariance related to kendall’s tau | 0.644 | 2 | 2 | 100% |
| 5 | Blum, J., J. Kiefer, and M. Rosenblatt (1961) Distribution free tests of independence based on the sample distribution function | 0.644 | 2 | 2 | 100% |
| 6 | Brown, D. J. and C. Calsamiglia (2007) The nonparametric approach to applied welfare analysis | 0.644 | 2 | 2 | 100% |
| 7 | Hoeffding, W (1948) A non-parametric test of independence | 0.644 | 2 | 2 | 100% |
| 8 | Echenique, F., S. Lee, and M. Shum (2011) The money pump as a measure of revealed preference violations | 0.644 | 2 | 2 | 100% |
| 9 | Yanagimoto, T (1970) On measures of association and a related problem | 0.644 | 2 | 2 | 100% |
| 10 | Chatterjee, S (2008) A new method of normal approximation | 0.511 | 4 | 2 | 25% |
Showing the top 10 of 31 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | Identifying causal effects with subjective ordinal outcomes | 0.405 | 1 | 1 |